Roth recharacterizations: still confused

[Guest mlgordon]

I converted my mutual fund IRA to a roth IRA in May 1998. Since then the value of my fund is approximately $1000 lower. If I recharcterize and then convert again to a roth, can I report the lower conversion value on my 98 taxes? I realize I have lost the right to spread the tax payment out over 4 years. Thanks for your assistance.

[Guest swilsonw]

Good question. If you recharacterize (or deconvert) your May 1998 conversion, it nulifies the original conversion. Reconverting would be a totally seperate act not directly connected to the reconversion.

If you then decide to reconvert, the taxes owed due to conversion would be owed in the year you convert (basically, you owe 1999 taxes on a 1999 conversion).

Hope that helps